NOVEMBER 22, 2021 — RETAIL SPENDING UP DESPITE INFLATION
The Commerce Department announced retail spending in October was up 1.7 percent, more than double the 0.8 percent seen in September, even though prices have been increasing at rates not seen since the 1990’s. The consumer price index was up 6.2 percent year over year in October.
With retail sales coming in strong in the lead up to the holidays, it seems to show people are willing to pay the higher prices, despite that consumer confidence has fallen to its lowest level in ten years.
Households are holding large amounts of cash as a result of government pandemic relief payments and enhanced unemployment benefits. Savings totaled $1.6 trillion in the third quarter. Consumer spending accounts for close to 70 percent of US GDP.